Strong Swiss Franc hits Holcim 1H, new Brazilian investment announced

18 August 2011

While Holcim reported first-half sales increases in all segments for first-half 2011, these gains were wiped out by currency headwinds, the group said in a statement.

Consolidated cement deliveries in 1H11 increased 4.7 per cent to 70.9Mt. Shipments of aggregates rose 11 per cent to 81.3Mt, and the volume of ready-mix concrete sold increased 5.7 per cent to 23.1Mm3. Europe achieved the biggest gain in the cement segment, for aggregates it was Latin America, and for ready-mix concrete North America.

However, the volume growth is not reflected in the statement of income. Due to currency effects, consolidated net sales decreased by seven per cent to CHF10.1bn and operating EBITDA declined by 19 per cent to CHF1.9bn. The Group companies in Romania, Russia, Argentina, Thailand, Singapore and Indonesia in particular positively influenced the result. An appreciable number of other group companies improved their results in local currency terms, but these successes were cancelled out in the consolidated financial statements by the strength of the Swiss franc.

Rising costs on energy, raw materials and transportation primarily impacted the performance of the two group companies in India. The operating EBITDA margin reached 18.7 per cent (first half of 2010: 21.5).

Cash flow from operating activities came to CHF72m due to the seasonal increase in net working capital, the lower operating EBITDA and one-off tax refunds in the previous year.

Net income declined 4.2 per cent to CHF 586m. The share attributable to shareholders of Holcim Ltd increased by eight per cent to CHF357m. This is explained mainly by the relatively high minority equity holdings in the large group companies in India.

Still, Holcim said cost While Holcim reported first-half sales increases in all segments for first-half 2011, these gains were wiped out by currency headwinds, the group said in a statement.

Furthermore, the group has decided to build a second kiln line at the Barroso plant, north of Rio de Janeiro in the state of Minas Gerais, Brazil which will be commissioned in 2014. With the new installation, the cement capacity of Holcim Brazil will increase by 2.6Mt from 5.3Mta to 7.9Mta. In addition, the rail terminal in Barbacena will be optimised.
Published under Cement News